Business Studies · Ch 2 — Principles of Management
Introduction
Introduction
From Toyota's Guiding Principles to the Study of Management Thought
The chapter opens by looking at Toyota Motor Corporation's own guiding principles, which show how a large enterprise can be driven by broad guidelines that shape both its vision and how that vision is achieved. Many other business enterprises have similarly followed their own principles over time, and a number of management thinkers and writers have studied principles of management from time to time.
There is, in fact, a long history of management thought. Management principles have evolved and remain in a continuous process of evolution, moving through several distinct phases: early perspectives, classical management theory, the neo-classical human-relations approach, the behavioural science approach, management science / operational research, and modern management.
A brief history of management thought. The earliest recorded management ideas date back to 3000–4000 BC — the Great Pyramid built by the Egyptian ruler Cheops required around 100,000 workers labouring for over twenty years, work that could not have been completed without sound management principles. The classical management theory phase (marked by the industrial revolution and the factory system) combined the rational-economic view (people are motivated mainly by economic gain), scientific management (F.W. Taylor's search for 'one best way' of production), administrative theory (Henri Fayol's focus on combining jobs and people into an efficient organisation), and bureaucratic organisation theory (Max Weber's effort to eliminate managerial inconsistencies caused by the abuse of power). The neo-classical / human relations approach (1920s–1950s), built on the Hawthorne Studies, showed that employees are guided by social needs and attitudes, not just rules and economic incentives. The behavioural science approach drew on psychology, sociology, and anthropology (thinkers such as Chris Argyris, Douglas McGregor, Abraham Maslow, and Fredrick Herzberg) to argue that individuals need to use their full capacities and creativity at work as well as at home. Management science / operational research brought quantitative techniques into managerial decision-making, while modern management treats organisations as complex systems and favours a contingency approach — using the technique best suited to the situation at hand.
This chapter focuses on two of the most influential contributors from the classical management theory phase: Fredrick Winslow Taylor, an American mechanical engineer who gave the concept of Scientific Management, and Henri Fayol, a French mining engineer who emphasised Administrative Principles. Before looking at their specific contributions in detail, it is useful to first understand what is meant by the term 'principles of management' itself.